July 3, 2013
Wed., July 3, 2013
Contact: Jenny Davies-Schley, 720-296-9545
Working Family Tax Credits Help Colorado Military Families Stay Afloat
July 4th Report Shows Active-Duty & Veterans Rely on EITC & CTC
DENVER – Just in time for the July 4th holiday, a new Center on Budget and Policy Priorities report shows 24,000 former and active-duty military families in Colorado receive the federal Earned Income Tax Credit (EITC) or the low-income component of the Child Tax Credit (CTC).
“On July 4th we focus on the incredible sacrifices our troops and veterans have made to help keep us safe, and it’s our duty to make sure they can provide for their families,” said Ali Mickelson, tax policy attorney at the Colorado Fiscal Institute. “Working family tax credits like the EITC and CTC are part of fulfilling that duty.”
Nationally, roughly 1.5 million military families – including 3 million children under age 18 – received one or both of the credits. The credits make a major difference to their economic security:
- The EITC and CTC together keep more than 140,000 military families — with nearly 300,000 children and 600,000 total family members — from falling below the poverty line, based on the federal government’s Supplemental Poverty Measure, which counts income from tax credits.
- These credits reduce the severity of poverty for about another 800,000 members of military families.
- The credits also help working families with incomes modestly above the poverty line, who still struggle with basic expenses like housing, school clothes, car repairs, and groceries.
The tax credits increase opportunity for children in military families. Recent academic research demonstrates that the EITC is linked to improved school performance (including better test scores) — and to increased employment and earnings when the children reach adulthood.
“There’s a lot at stake for Colorado’s military families when it comes to the Earned Income Tax Credit and Child Tax Credit,” said Colorado Fiscal Institute’s Mickelson. “We’re working very hard to make sure Congress protects these tax credits in the months ahead, including improvements made in recent years that benefit so many Colorado military families.”
Only people who are working can claim the credits, which were modestly expanded in recent years so they provide more help to more families. On average the credit amounts to $1,000 per household from the low-income portion of the Child Tax Credit in 2011 and $2,650 from the EITC.
This year the Colorado General Assembly passed SB1 to reinstate a state-level Earned Income Tax Credit to go into effect the first tax year after the next TABOR surplus and a state Child Tax Credit to be available as soon as Congress passes legislation to allow states to collect sales tax from out-of-state retailers. Colorado Gov. John Hickenlooper signed SB1 on June 5, 2013.
Colorado Fiscal Institute is a nonprofit, nonpartisan organization that provides credible, independent and accessible analyses of fiscal and economic issues facing Colorado in order to inform policy debates and foster greater economic prosperity for all.